Find out how GST will help create more employment opportunities

Government hopes to create 1.3 mn jobs on account of GST. However, Aasaanjobs founder Dinesh Goel feels that a lot of these opportunities will be on paper.

After the rollout of Goods and Services Tax (GST), the industry expected over one lakh immediate new employment opportunities, including in specialised areas like taxation, accounting and data analysis.

Aasaanjobs Founder and CEO Dinesh Goel feels the expectation seems slightly over-estimated. However, on the bright side jobs will increase over the long term because of a stricter tax regime, as the unorganised cash-economy sectors become organised, he feels.

According to experts, the new tax regime will fuel demand for professionals in various segments of the economy. Goel says employment opportunities can be created and sectors like automobile, FMCG, logistics, retail and hospitality industries will see significant growth in job opportunities over the year.

There is also expectation the tax reform will open up 10 -13 percent job opportunities in formal job creation.

How will GST help create more job opportunities?

“The most obvious deduction is that GST will make it easier to do business in the country which, in turn, should attract more companies to set up operations,” Goel told Moneycontrol.

The other reason he stated is that in the earlier tax regime, lots of jobs that companies wanted to outsource, could not be done since they could not take input credit for service tax, which would in-turn hit the liquidity of the company.

But, in the new regime of a single tax, a product company can give out invoices with GST (instead of VAT) and can take credit on GST for the services availed from service companies. “This now will make it easier for them to conveniently outsource jobs. The end result will be growth of a lot of temporary jobs,” he said.

Experts are also of the opinion that demand for semi-skilled workers will be high on account of GST, such as carpenters, masons, plumbers, electricians, draftsman, tailors, weavers, food technologists, and marketing jobs in the retail segment.

How will GST help semi-skilled workers like carpenters, masons, plumbers?

Goel says in the past, companies would not on paper show semi-skilled employees as actual employees unless they were going to hire them on their own payroll. This was to avoid multiple kinds of taxes.

“But, now it will be much easier for companies to outsource these jobs and their cash flow will not get impacted.” He added that with much stricter tax processes companies will find it hard to deal in cash with their employees and will prefer hiring/outsourcing these semi-skilled employees making them a part of the economy on paper.

“It will also become easier for the government to now track minimum wages given to these semi-skilled employees which the companies could escape in the past,” Goel added.

The government has forecast that by next year 1.3 million jobs will be created. However, Goel says that many of the job opportunities will increase on paper “but in reality what is going to happen is that a lot of jobs that the government was not able to track earlier will become trackable with the implementation of GST. Essentially, this is the unorganized sector becoming organized,” he said.